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If you do not sell, or resell, items such as this as a business then it is a capital asset in your hands and the transaction is the sale of property held for personal use.
As such, you cannot deduct a loss and can either report the sale as the sale of a capital asset (much in the same way as you would report the sale of a security, such as a stock, bond, or mutual fund) or not report it at all. Either way, you cannot recognize a capital loss on the sale of property held for personal use.
Yes, there will be no tax liability on this transaction (since you sold a personal-use item at a loss).
Probably best to report it to avoid some sort of mismatch. Either way, it will not hurt to report it.
If you do not sell, or resell, items such as this as a business then it is a capital asset in your hands and the transaction is the sale of property held for personal use.
As such, you cannot deduct a loss and can either report the sale as the sale of a capital asset (much in the same way as you would report the sale of a security, such as a stock, bond, or mutual fund) or not report it at all. Either way, you cannot recognize a capital loss on the sale of property held for personal use.
Thanks @tagteam for your reply, This was NOT business transaction and it was between individual to individual and since this was a personal item I purchased for myself and then sold it for less as it was used, so it will generate 1099K as it was above 2022 threshold of $600, so I would still have to report it in TurboTax but in the cost offset I will have to put the cost of the item as it was originally purchased for more and sold for less which will make it effectively 0 with no tax implications on my return? Am I correct? Please advise and clarify if I am not correct. Thanks once again.
Yes, there will be no tax liability on this transaction (since you sold a personal-use item at a loss).
Thanks @tagteam for your prompt response. Much appreciated. But I will still have to report 1099K from Paypal when received when filing my returns for the year 2022 in 2023?
Probably best to report it to avoid some sort of mismatch. Either way, it will not hurt to report it.
Thanks @tagteam for your guidance. Appreciate it. Well deserved CHAMP badge on you.
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